Shoppers in Pakistan who often buy from popular global online stores like Temu and Google have received good news this week. The federal government has decided to remove the five per cent tax that was earlier charged on digital goods and services bought from other countries.
The Federal Board of Revenue (FBR) shared that the tax cut will take effect on July 1, 2025, after the Parliament included it in the Finance Bill 2025. This change comes after the federal cabinet gave the final approval and a formal notification was issued to make it official.
This tax was first added to help increase Pakistan’s tax income from the booming online shopping sector. It applied to any service or item that people in Pakistan bought from sellers outside the country. The FBR had expected this tax to collect around Rs40 billion every year.
However, many international companies and customers were not happy with the tax. For example, Chinese shopping app Temu had raised its prices for Pakistani buyers by as much as 300% after the government put new taxes on online sellers from abroad. This sudden price jump made shoppers worry about the extra cost of buying products from other countries.
Now that the digital tax has been cancelled, shoppers hope that prices on sites like Temu will come down again and that buying products from overseas will become cheaper and easier.
This decision is also expected to encourage more foreign tech companies to do business in Pakistan without fear of extra taxes, bringing more choices for local customers.
